One of Birmingham's biggest colleges may be forced to close after being labelled as "failing" in a damning Ofsted report.

City College has been given one year to shape up after gaining the worst grade possible in four categories measuring educational provision.

Ofsted's condemnation of the college as "inadequate", following an inspection in November, conflicted dramatically with its own "good" assessment of its performance.

The board of governors has accepted the resignation of principal Tony Henry, who offered to step down before Christmas before the publication of the report.

The college's deputy Peter Harwood has been installed as acting principal, with responsibility for its 23,000 students, until a permanent replacement is found.

Mr Harwood said: "The inspection was extremely critical of the college and although it is a difficult time for staff, students and management, we have accepted the judgments of Ofsted and are committed to a process of improvement.

"The college was already addressing many of the areas of weakness identified in the report and recognised the need for fundamental change.

"Staff and management face challenging times ahead and accept that significant progress must be made against a very short time scale."

In its main judgement, Ofsted stated: "The overall effectiveness of provision is inadequate.

"This disagrees with the college's self-assessed judgement of 'good'. Achievement and standards are inadequate.

"Many success and pass rates are well below national averages and have been so for some time."

The report condemned teaching and learning as "inadequate", with teachers in many lessons giving "insufficient attention to learning and students' progress".

Assessment was not up to scratch, with students' progress frustrated by insufficiently challenging feedback and inadequate support.

Ofsted also dubbed leadership and management "inadequate", adding: "This disagrees with the self-assessed judgement of good."

Inspectors criticised Mr Henry for focusing too much on building projects and improving the college's financial position at the expense of learners.

City College recruits students from some of the most disadvantaged areas in the city, with the majority from Handsworth, Aston, Saltley, Small Heath and Soho. Some 60 per cent of them are from ethnic minority backgrounds.

It was created in 1998 following the merger of East Birmingham College and Handsworth College and students are spread over seven main campuses.

Mr Henry - one of the highest paid college leaders in the region - was due to retire shortly after 35 years in the public sector and 21 years working as a principal.

Speaking to The Birmingham Post before Christmas, after offer-ing his resignation, he said of the Ofsted assessment: "I am devastated by it. The simple fact is that our students don't achieve as well as students in other colleges. I have to face my colleagues."

The college has been given a notice to improve which means it must significantly act on Ofsted's findings or face action including merger or potential closure.

Peter Brammall, area director for the Birmingham and Solihull Learning and Skills Council which is responsible for funding post-16 education outside universities, said: "We are pleased that City College has already taken decisive steps to address the issues identified in the Ofsted report.

"We look forward to working with the college in order to ensure the inspectors' recommendations are fully complied with and that the quality of its provision meets the needs of learners and employers across Birmingham," he added.